CATHY BISSOON, District Judge.
For the reasons stated below, the motion for summary judgment filed by Defendant Sylvan Energy, LLC ("Sylvan") (Doc. 48) will be denied. Additionally, the motion for summary judgment field by Defendant EQT Production Company ("EQT") (Doc. 52) also will be denied.
Billy E. Burke, Bonnie I. Burke, and Chris E. Burke ("Plaintiffs") bring the instant lawsuit against Defendants for breach of contract, trespass, and to quiet title to a parcel of land located in Greene County, Pennsylvania. Plaintiffs seek injunctive and declaratory relief, as well as money damages. This cause of action initially was filed in the Court of Common Pleas of Washington County, Pennsylvania, on October 1, 2010. (Doc. 1-1 at 1). It was removed to this Court, and assigned to the Honorable David S. Cercone, on October 7, 2010.
Plaintiffs filed an amended complaint on December 20, 2010. (Doc. 22). Defendant Sylvan moved for summary judgment on Plaintiffs' claims against it on July 26, 2011. (Doc. 48). Defendant EQT moved for summary judgment on the following day, relying substantially on the same arguments and evidence put forth by Defendant Sylvan. (Docs. 51-53). The issue of whether Defendants are entitled to summary judgment with respect to Plaintiffs' claims is ripe for disposition.
Plaintiffs are the owners of a 136-acre plot of land located in Greene County, Pennsylvania. (Doc. 22-1). On November 6, 2007, Plaintiffs granted a lease to Defendant Sylvan to the oil and gas rights of said property.
The crux of Defendants' arguments is that the work that they performed on Plaintiffs' property "clearing access roads, beginning tree removal between the Burke-2 and Burke-3 Wells, stacking trees along the roadway for the damages claim evaluation, and clearing, leveling and developing the well pad of the Burke-3 Well" on November 5, 2010, qualified as "operations preparatory, incident, and related to drilling for oil and gas" under Paragraph 12 of the lease, thus extending the primary term.
Plaintiffs respond that none of these acts is explicitly listed in Paragraph 12 of the lease as "operations" that would extend the primary lease term and, as such, the lease is ambiguous with respect to them. (Doc. 64 at 9-10); (Doc. 65 at 9-10). It is Plaintiffs' position that, when read in the context of the entire document, the term "operations" requires, at the very least, that "drilling operations" have occurred on the leasehold premises. (Doc. 64 at 10); (Doc. 65 at 10). Plaintiffs further argue that Defendant Sylvan has acquiesced to this interpretation of the lease. (Doc. 64 at 10-11); (Doc. 65 at 10-11). They also suggest that Defendant Sylvan was not in possession of a permit from the DEP on November 6, 2010, and thus could not have begun lawfully drilling operations. (Doc. 64 at 9); (Doc. 65 at 9). Finally, Plaintiffs dispute that Defendant Sylvan did anything more as of November 6, 2010, than drive a bulldozer over their property, cursorily move some dirt and knocking down a few shrubs and trees, and set up a stick marking the site of a proposed well. (Doc. 64 at 7); (Doc. 65 at 7).
In Pennsylvania, oil and gas leases are governed by principles of contract law.
"A contract provision is ambiguous if it is susceptible of two reasonable alternative interpretations."
The language of Paragraph 12 of the lease is extremely broad. Although Plaintiffs attempt to draw from of Paragraph 20 to limit the definition of "operations" to those directly related to actual drilling, the undersigned notes that the language of Paragraph 8 appears to include "the construction and use of roads" within the meaning of this term. (Doc. 6-2 ¶ 8). However, regardless of whether Paragraph 8 properly modifies the meaning of the word "operations," as it is used in Paragraph 12, it is clear that Defendants' alleged actions of clearing access roads, beginning tree removal between the Burke-2 and Burke-3 Wells, stacking trees along the roadway for the damages claim evaluation, and clearing, leveling and developing the well pad of the Burke-3 Well — all during the pendency of a permit application with the DEP — qualify as "work preparatory, incident or related" to the activities explicitly described in Paragraph 12.
However, Plaintiffs dispute that Defendant Sylvan engaged in the above acts prior to November 6, 2010, characterizing their work instead as much more cursory in nature, and, implicitly, not performed with the intention of engaging in "operations" within the period of time allowed by the lease. While all parties submit photographs and affidavits which are purported to show the extent of the work performed by Defendant Sylvan, none of these — individually or in the aggregate — is sufficient to prove one side's case over the other under the summary judgment standard. Accordingly, this Court finds that there is a genuine issue of material fact with respect to the extent of the activities engaged in by Defendant Sylvan on the Burke property as of November 6, 2010. Furthermore, there remains doubt as to whether Plaintiffs' version of facts, if proven, would constitute "operations," even under the broad terms of the lease. Accordingly, Defendants' motions for summary judgment will be denied.
AND NOW, this 28th day of March, 2012,
IT IS HEREBY ORDERED that, for the reasons stated above, the motion for summary judgment filed by Defendant Sylvan (Doc. 48) is DENIED.
IT IS FURTHER ORDERED that the motion for summary judgment filed by Defendant EQT (Doc. 52) is DENIED.